TRINIDAD AND TOBAGO SECURITIES AND EXCHANGE COMMISSION DECISION ON THE APPLICATION OF THE TRINIDAD AND TOBAGO STOCK EXCHANGE TO AUTHORIZE THE DE-LISTING OF BWIA WEST INDIES AIRWAYS LIMITED In accordance with sections 45 and 134 of the Securities Industry Act, 1995 December 22, 2006 1. BACKGROUND TO THE HEARING HELD ON DECEMBER 15, 2006 A. THE APPLICATION OF THE TRINIDAD AND TOBAGO STOCK EXCHANGE 1. By letter to the Commission dated May 12, 2006 the Trinidad and Tobago Stock Exchange (“the Stock Exchange”), a self-regulatory organization registered under section 34 of the Securities Industry Act, 1995 (“the SIA”), requested that the Commission authorize the de- listing of BWIA pursuant to section 45(1) of the SIA. The Stock Exchange indicated that BWIA West Indies Airways Limited (“BWIA”) had requested a further three (3) month suspension of trading in its shares, but the Exchange had decided that it could not accede to BWIA’s request. However, this letter did not state the grounds upon which the Stock Exchange was seeking the de-listing. 2. By letter dated June 20, 2006, the Stock Exchange wrote to the Commission listing the following four (4) grounds upon which it was seeking to rely with respect to its application to have BWIA de-listed (collectively referred to as “the four grounds”): (i) Unsatisfactory financial condition or operating results; (ii) Inability to meet current debt obligations or adequately finance operations; (iii) Failure to make timely adequate and accurate disclosures of information to its shareholders and the investing public; and (iv) An effective and fair market cannot be made in the security. The Stock Exchange also advised that its request to have BWIA de-listed would not be in breach of any of the Rules of the Stock Exchange. B. HISTORY OF BWIA ON THE OFFICIAL LIST OF THE STOCK EXCHANGE Listing of BWIA’s Shares 1. By letter dated November 27, 2000, the Commission issued its receipt to BWIA for the prospectus covering the issue of 12 million BWIA shares at a price of TT$7.85 or US$1.25 in an Initial Public Offering (“the IPO”). 2. The Stock Exchange has represented that an application was made to it later that year for the listing of BWIA’s ordinary shares on the Official List of the Stock Exchange upon completion of the IPO. 3. The issue of 12 million shares to the public commenced on December 4, 2000 and remained open in other Caribbean jurisdictions until January 19, 2001. 4. BWIA’s issued share capital at the date of listing was 46,824,656 shares, of which 15.5% (representing 7,279,906 shares) was taken up by the public in the IPO. 5. BWIA was listed on the Stock Exchange’s Official List on February 6, 2001 at the issue price of TT$7.85. Suspension of Trading in BWIA’s Shares 1. By letter dated November 15, 2005, BWIA requested the suspension of trading in its shares for a period of three (3) months, in order to halt any speculative trading pending the restructuring of the company. It indicated that it also wanted the option to request the continuation of the suspension if circumstances warranted this. 2. By letter dated November 16, 2005, the Stock Exchange advised the Commission that trading in BWIA’s shares had been suspended with immediate effect for a period of three (3) months at the request of the company. 3. By letter dated February 9, 2006, BWIA requested an extension of the suspension of trading in its shares for a further period of three (3) months. It indicated that the Board of Directors had undertaken an in-depth analysis of the company to inform the restructuring process, and that the company was in the process of preparing a business plan and a plan of restructuring. It was unable to indicate a definitive time-frame for the completion of this exercise. It further indicated that it had also requested an extension of the suspension of trading on the Barbados Stock Exchange. 4. By letter dated February 14, 2006, the Stock Exchange granted the extension of the suspension for a further three (3) months. 5. The Stock Exchange thereafter wrote the abovementioned letters of May 12 and June 20, 2006, in respect of its application to the Commission to have BWIA de-listed. 2. DE-LISTING PROCEDURE De-listing of Securities under section 45 of the Securities Industry Act, 1995 Section 45 of the SIA confers authority on the Commission to grant an order that authorizes the Stock Exchange to de-list a security listed by it, as well as impose such conditions as deemed appropriate by the Commission. It provides as follows: (1) No self-regulatory organization shall de-list a Security admitted for quotation by it, unless it obtains an order from the Commission authorizing the de-listing and imposing, for the protection of investors, such conditions, if any, as it thinks fit. (2) The Commission shall not refuse to authorize the de-listing of a security, unless the de- listing is in breach of- (a) the rules of the self-regulatory organization; or (b) an agreement entered into by the issuer of the security. De-listing Criteria under Rule 401 of the Stock Exchange Rules Rule 401 of the Stock Exchange Rules (“the Rules”) enumerates de-listing criteria to be considered by the Stock Exchange in its determination of whether to remove a company from its official list. The relevant parts of Rule 401 provide as follows (the underlined areas are the grounds upon which the Stock Exchange relied as indicated above): Rule 401 (1) The aim of the Trinidad and Tobago Stock Exchange is to provide the foremost auction market for securities of well established companies in which there is a broad public interest and ownership. (2) Securities admitted to the official list may be suspended from dealings or removed from the list at any time. Prior to the delisting of any security, the Exchange shall make an appraisal of, and determine, the suitability for continued listing in light of all the pertinent facts whenever it deems such action appropriate. The grounds under which a company’s security may be de-listed include, but are not limited to, the following: (a) Failure of a company to make timely adequate and accurate disclosures of information to its shareholders and the investing public; (b) Failure to observe good accounting practices in reporting of earnings and financial position; (c) Conduct inconsistent with just and equitable principles of trade; (d) Unsatisfactory financial condition or operating results; (e) Inability to meet current debt obligations or to adequately finance operations; (f) Abnormally low selling price or volume of trading; (g) Unwarranted use of company’s funds for the repurchase of its equity securities, (h) Any other event or condition which may exist or occur that make further dealings and listing of the securities on the Exchange inadvisable or un- warranted in the opinion of the Exchange. (i) When a company falls below any of the criteria enunciated in Rule 401(3), the Exchange may give consideration to any definitive action that a company would propose to take that would bring it in line with original standards. Changes that a company might consider or make that would bring it above the delisting criteria but not in line with the original listing standards would normally not be adequate reason to warrant continued listing. Rule 401(4) also lists other criteria which may result in the de-listing of a company including, but not limited to: (a) Reductions in Operating Assets and/or scope of operations; (b) Bankruptcy and/or liquidation; (c) Authoritative advice/proof that a security is without value; (d) Registration no longer effective; (e) Proxies are not solicited for all meetings of stockholders; (f) Agreements are violated; (g) Interest coverage of debt securities is inadequate; (h) Failure to meet payment, redeem or retire securities on due dates. Hearings pursuant to section 134 of the Securities Industry Act, 1995 Prior to making a final order in an application of a self-regulatory organization to de-list a security pursuant to section 45 of the SIA, the Commission is required to hold a hearing pursuant to section 134. Pursuant to section 134(9), the requirement to provide an opportunity for a hearing pursuant to section 134(1) is unnecessary when the Commission determines that the relevant order: is essentially procedural; or does not adversely affect the rights or interests of any person. The Commission made a determination that the application to de-list BWIA could affect the rights or interests of its shareholders and accordingly decided that it was required to hold a hearing on the Stock Exchange’s application under section 45 of the SIA. The Commission convened a hearing in order to give interested parties an opportunity to advance any arguments relevant to the Stock Exchange’s application to de-list BWIA. In this regard, and in keeping with section 134 of the SIA, the Commission published in the daily newspapers in Trinidad and Tobago a Notice of Hearing dated November 24, 2006, and issued a Notice of Hearing dated November 27, 2006 to each of the shareholders listed in BWIA’s register of shareholders, both local and foreign. The matter was heard on Friday 15th December, 2006. 3. PROCEDURE AT THE HEARING The Commission’s Hearing Panel consisted of the Commission’s Chairman, Mr. Osborne Nurse, and Commissioners Mrs. Bridgid Annisette-George, Dr. Shelton Nicholls and Mr. Vishnu Dhanpaul. The following procedure was applied: 1. The Stock Exchange, represented by its Corporate Secretary, Mrs.